Rob Hopkins of Transition Culture writes:
At last night’s Food and Farming in Transition evening at Dartington Hall, of which I shall write more soon, Chris Skrebowski, editor of the Petroleum Review and author of the Megaprojects reports, gave a talk which used a Powerpoint which he had to zip through quite fast. … here is Chris’s presentation, an opportunity for all you peak oil anoraks to update your presentations with the latest graphs!

BA: Below is a text transcription of 9 of the 24 slides.

Chris Skrebowski: Trustee of the Oil Depletion Analysis Centre and
Editor of Petroleum Review, Inergy Institute, London

Who am I?

  • Chris Skrebowski has spent half his working life in the oil industry and the rest as an oil journalist

  • Free of corporate or political pressure he brings a healthy scepticism to the problem
  • Not pessimistic by nature, not anti-Oil
  • Basic approach to Peak Oil analysis
  • Don’t guess, assume or hope – let the numbers talk
  • Observe what companies do, not what they say.

So what is ‘Peak Oil’?

  • It is the point when further expansion production becomes impossible because:

  • New production flows are full offset by production declines (depletion)
  • You never run out of oil
  • You do run out of incremental flows
  • The world needs oil products to support growth

Latest BP statistics show Peaks are already happening

  • OECD production peaked in 1997 and has now declined by just under 2 million b/d (8.8%)

  • Non-Opec, non-FSU production peaked in 2002
  • North America/Mexico peaked in 1997
  • North Sea – UK/Norway/Denmark peaked in 2000 now declined by 1.2 million b/d (19.2%)
  • Around 25 significant producers in delcine
  • About 35% of global production from decliners

The practical realities

  • The world needs oil production flows

  • Consumers need deliver flows
  • Reserves are only useful as flows
  • Peak oil is when flows can’t meet the required demand
  • Worry about flows not reserves
  • Many talk of reserves and forget flows

Seven key pieces of evidence suggesting we are close to Peak

  • Falling discovery rate, few large discoveries

  • Increasing number of countries in sustained depletion
  • Companies struggling to hold production
  • Non-geologic threats [to] future oil supply
  • The current lack of incremental flows
  • Few countries with real growth potential
  • Sustained high oil prices

A simple observation – or why peak will be earlier than most people expect:

“Global production falls when loss of output from countries in decline exceeds gains in output from those that are expanding.”

Post-peak we are going to need other energy sources – Opportunity

  • How fast will supply decline post-peak?

  • Possibly around 2-3% / year like the US onshore but initially at just 1-2%
  • But, it could be much faster
  • Suppliers could anticipate, ration out supplies, delay peak and force adaptation
  • Some might use military strength to commandeer supplies

My conclusions at very best

  • Supply will remain tight and prices high barring a major economic setback

  • Oil supply will peak in 2011/12 at about 92-94 million barrels/day
  • There will be [be] supply shortfalls in winter before Peak
  • Oil supply in international trade may peak earlier than the oil production peak
  • Aided by CERA’s optimism we are still in denial
  • There are huge challenges and huge opportunities